According to data from the Institute for Supply Management (ISM), the manufacturing PMI for March came in at 52.7, a slight increase from February’s 52.4, and also surpassing analysts’ expectations of 52.5.
In other metrics, the price paid index—which gauges inflation—climbed from 70.5 to 78.3, while the employment index saw a minor drop from 48.8 to 48.7. Additionally, the new orders index decreased from 55.8 to 53.5.
Market Reaction
The U.S. dollar continued its downward trend from Wednesday, pushing the U.S. Dollar Index (DXY) to new lows around the 99.40 range, following a significant drop on Tuesday.
USD Price Today
The table below illustrates the percentage changes of the U.S. dollar (USD) against several major currencies today, with the dollar showing the strongest performance against the Japanese yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.47% | -0.62% | -0.02% | -0.10% | -0.58% | -0.28% | -0.69% | |
| EUR | 0.47% | -0.15% | 0.46% | 0.38% | -0.11% | 0.20% | -0.23% | |
| GBP | 0.62% | 0.15% | 0.61% | 0.52% | 0.05% | 0.35% | -0.06% | |
| JPY | 0.02% | -0.46% | -0.61% | -0.07% | -0.53% | -0.26% | -0.64% |
The heat map showcases the percentage shift between major currencies. It’s an interesting way to grasp how the market is moving lately. For instance, if we look at USD versus JPY, we see a change that can reflect broader economic sentiments.
Just to note, publication of the ISM Manufacturing PMI is set for Wednesday, March 13. Analysts are anticipating a slight decline in the number, perhaps down to 52.3 from February’s 52.4.
This PMI indicator is often seen as a key gauge for the health of manufacturing in the U.S., influenced by surveys from various companies. Typically, if the figure is above 50, it signifies expansion, while anything below indicates contraction, which is interesting to think about how such assessments impact investor behavior.
What to Expect from the ISM Manufacturing PMI Report?
In February, the ISM release noted that manufacturing activity remained in expansion territory, although it had decelerated slightly from January. It’s noted that the manufacturing sector has expanded for just the second month in a row, which hints that it’s still quite vulnerable, especially considering the impacts of the pandemic.
If we take a closer look, the February report indicated that there was a revival in new orders after a few months of contraction, although the latest numbers suggest a slight decrease overall. The price index also spiked significantly this month, drawing some attention.
Market watchers will likely be focused on both inflation and employment sub-indices, especially with the non-farm payroll report looming on Friday. Actually, even if employment isn’t the main focus for the Fed’s policy decisions anymore, it still shapes how investors view monetary policy and potential changes.
The reaction to the headlines could swing market sentiments either way. If the ISM report surpasses expectations, especially crossing that 50 mark, it could boost demand for the USD. On the flip side, disappointing results might lead to additional pressure on the dollar.
When is the ISM Manufacturing PMI Report Release? What Could It Mean for EUR/USD?
The ISM Manufacturing PMI will be unveiled at 14:00 GMT on Wednesday. Leading up to this, the dollar has seemed to maintain its status as a safe-haven asset, although there’s been a bit of a lull in momentum. Meanwhile, EUR/USD is hovering close to the 1.1500 level, which feels precarious.
Some analysts, like Valeria Bednarik, are warning that persistent economic concerns could push EUR/USD towards the 2026 low if the ISM report turns out positive. She notes that currently, the technical indicators paint a bearish picture, hinting that any upward movement might be short-lived.
Bednarik also speculates that an optimistic ISM report might send EUR/USD tumbling closer to monthly lows. Alternately, if the report disappoints, it’s quite possible EUR/USD could approach even lower levels again, putting more pressure on the currency pair.
